Photo Estimating and Their Supplemental App-Crap


By: Stephen Behrndt

Would you stand by and watch your friends and associates operate their businesses in a reckless manner showing indifference and misunderstanding in their actions?

Would you accept behavior that wallows in the apathy of an industry that is detrimental to their livelihoods and the livelihood of others?

The collision repair industry needs to pause, stand back and examine this newly charged task of reconciling automobile losses through photo-estimates. Why is this insurance company’s obligation fast becoming ours to manage as repairers are willingly becoming assistants to a third party’s quest to short-pay automobile losses? The photo-estimating evolution that is taking over the manner in which automobile losses are being handled is for the benefit of the insurance industry, not the collision repair industry or the vehicle owners. Fast, quick and easy being touted as the selling point as you, or your customers, take photos of the loss and download the information to a desk auditor employed by the insurance company.

Everyone knows the insurance industry’s justification to photo-estimate is focused on cost control by eliminating physical inspections and their appraisal staff. However, are these losses being conducted fairly? By accepting the request to photo-estimate and photo-supplement are collision repairers interfering with a vehicle owner’s rights to be indemnified based on the legal definition of indemnification? Are repairers contributing to bad faith and breach of contract infringements as they collaborate with the limits of liability within insurance contracts? Are repairers supporting unfair settlements through policy language that short-changes and diminishes the rights of the policy holders and claimants? Collision repairers are being positioned unlawfully through the utilization of photo and supplemental apps. Repairers are being coerced to act as go betweens for the insurance industry’s wanton disregard towards the original manufacturer’s repair requirements and guidelines. By accepting the photo-app process repairers are facilitating the discounting and improper repairing of their customer’s vehicle without recognizing they are in the middle of the indemnity transaction and can be held fully accountable.

Throughout my career as a collision repair professional I have been involved with various trade associations on the national, state and local levels. At these meetings, discussions would end with complaints about rate reimbursement, estimating guides, and control the third party has over the collision repair profession. You could have attended a meeting of body shop owners 25 years ago and then attend a similar meeting today and the ending topics would be the same. Labor rates, automated labor guides and control.

If you are in agreement by reading this commentary, then why in the hell would you accept photo-estimating as a method to operate your business? The pied piper has the collision repair industry led astray. The repair industry has been misled into this method of assisting their customers as a process to be paid fast, quick and easy but take a minute and examine the legality and responsibility that repairers will absorb by using the photo-app procedures. Your customer brings you an estimate based on photos they have sent to an insurance company. The majority of these estimates are underwritten opening the door for a shop’s supplemental request.

Most collision repairers do not have the legal awareness to understand the hidden purpose that lies within the supplemental-app. We understand the insurance company is intentionally low-balling the sheet but it’s not only to short-pay the loss. The principle reason behind the supplement-app is to trick the repairer into a contractual relationship without the shop owner realizing they are taking the bait.

Once the vehicle is dismantled and additional damages are found, you contact the insurance company who directs you to download their supplemental application and follow the guidelines provided. It is here, at this moment, where your rights to operate independently or work as an arm of the third party becomes business threatening. Those three well-known topics of debate are hidden within the request to download their app. Labor rates, estimating guides and third party control are within your grasp to either safeguard your business or accept total liability for the repairs. It is at this moment you need to fully understand a “Contract of Adhesion”. Take a few minutes and look up the definition of what you are about to accept. A Contract of Adhesion is where you agree to certain terms, conditions and liabilities yet have no position to change the terms of the arrangement. Think DRP. We already know when you sign a direct repair contract you give up your rights to operate as an independent business. You freely accept the contracted rates, labor guides and control over proper reimbursement hoping for volume in return to off-set your questionable profit.

You download the insurance company’s automated app or supplemental program to send them your shop’s photos, your repair order, and whatever other information they require. In return they send you their desk-audited estimate, based on their labor rates prepared on their estimating format following their data base guidelines (control). In addition, your paint and materials will be reimbursed at the insurance company’s dollar per paint hour, which by the way also includes shop materials. After accepting these conditions the company will send you their check to pay for the repairs. Your shop has fallen into the trap. You have been snared like a rabbit, followed the pied piper into a Contract of Adhesion without any type of benefit other than repairing the customer’s damaged vehicle because now you are following the insurer’s data base, their estimating guidelines along with whatever the third party payer determines as proper reimbursement. In addition, no one from the insurance company is physically inspecting the damages on behalf of the vehicle owner which means you automatically absorb all of the liability at 100%. By accepting the insurance company’s photo-supplement protocol, you have also accepted sole responsibility for whatever parts, materials and procedures they have listed. Once you have accepted and deposited the check your business is totally immersed into a Contract of Adhesion.

It is all fast, quick and easy as you are participating in the consolidation of the collision repair industry under the terms and conditions of predatory market control. No longer will you be able to complain about the labor rate issue or expect to be reimbursed based on job costing and true labor cost, because you have accepted the third party’s guidelines as adequate to perform the job. You cannot take your short-pays to court and ask a judge to determine final payment based on actual business cost versus prevailing and competitive when you agreed to download the insurer’s information and repair under the conditions of adhesion. Your repair authorization/contract signed by the customer becomes worthless while the third party payer takes over first position within the transaction without signing any agreement. You are in no position to complain about the estimating guides or the included or non-included items as the P-Pages become non-existent within the fair and competitive stipulations offered by the internet estimator. It’s no longer an estimating “guide,” it’s their bible dictating to you how to repair your customer’s damaged vehicle. You have lost all control over the repair process due to you embracing their estimate and supplemental downloading. Your shop either repairs the damaged vehicle based on their guidelines or not. There lies the question that this article is all about.

Why would you be obligated to the terms of an internet relationship when it forces your business into a Contract of Adhesion, thereby removing your rights to operate as a free enterprise. Your acceptance into the slavery of the machine becomes real. The consolidation of the collision repair marketplace has begun and every time a body shop downloads a supplemental assignment from the insurance industry the shop is agreeing to the terms of consolidation. Your computer and their computers are connecting for the purpose of engagement which identifies to the establishment you have connected and freely accepted their protocol. A few years into this method of operating and the name on your business is nothing more but a facade. Why can’t any of you see this? It is the fast, quick and easy demise of the independent collision repair industry as well as the contracted direct repair shops.

The simple solution to all of this photo-estimating and supplemental app-crap is to stop and say no. As of this date there are no federal or state rules that govern your shop to download any insurance company’s information. However, if we keep following the third party’s request to download, we will codify or simply agree with their authority over our businesses turning their protocol into standard operating procedures based on the third party’s rates, their database and yes, their control.

Here is how you take back your business.

Simply notify your customer and the insurance company that you do not participate in downloading any type of arrangement from a third party and to safeguard your customer’s rights, have no affiliation with any insurance company. Explain to your customer it is your responsibility as a business owner to follow the original manufacturer’s guidelines and you cannot be involved with any third party’s manipulations of your repair product.

Every policyholder or claimant has a right to a physical inspection and the vehicle owner must expect the insurance company to abide by that right. If the insurer refuses to physically inspect the damaged vehicle. Place them on “written notice” that explains they have 72 hours to inspect the damaged vehicle. If the insurance company fails to do so, they waive their rights to inspection, which will be considered an acceptance of these terms. Repairs will commence with expectations of payment in full when completed based on your shop’s final repair invoice, using your shop’s hourly rates, completely under the control of your business.

This is the same manner which normal businesses operate and you expect the same treatment. It is the opinion of this writer with 50 years of experience in the collision repair industry. The only way to achieve independence is to remove all third party interference from your business, especially any relationship that leads to a Contract of Adhesion.